Affymax Stares into the Face of Oblivion

After the markets closed last night, drugmaker Affymax Inc. (NASDAQ: AFFY) said that it would cut 230 workers (75% of its workforce) and "evaluate strategic alternatives" for the company. Shares are getting pounded this morning before the markets open.

In last night's announcement, Affymax said it was taking these steps "to focus the company's resources on the ongoing investigation of reported hypersensitivity reactions" to its leading drug. The company was forced to recall its anemia drug, Omontys, in February after 50 patients developed severe allergic reactions to the injectable drug and five people died. Affymax really has no other drug pipeline available to take up the slack from the recall, which may turn out to be permanent. Japan's Takeda Pharmaceutical Co. is a partner with Affymax in making and distributing Omontys.

Among the strategic alternatives the company is considering are further restructuring, a "wind-down of operations, or even bankruptcy proceedings."

Shares of Affymax are down more than 56% in premarket trading this morning, at $1.27, well below the 52-week range of $2.26 to $27.74.